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Sensex ends the week 2% lower
Fri, 15 Jul Closing

Indian stock market opened on a strong positive note today, on the back of better than expected results by software major, TCS. However, soon after the opening bell, things took a turn for the worse, and the markets traded below the dotted line. The Indices could not recover much after that and ended the day, and consequently the week on a negative note. The BSE-Sensex closed 2% lower this week.

The BSE-Sensex closed lower by around 56 points (down 0.3%), the NSE-Nifty closed lower by around 19 points. The BSE-Midcap and BSE-Small cap, fared slightly better, and were mostly trading flat for the day. While gains were seen in IT and power stocks, metal and auto stocks were at the receiving end.

As regards global markets, Asian indices closed on a mixed note today while European indices have also opened in the negative. The rupee was trading at Rs 44.53 to the dollar at the time of writing.

India's biggest bank, State Bank of India's (SBI) Chairman stated that the bank may look at a combination of ways in order to raise capital. The bank is looking at a combination of various instruments such as follow on public offer (FPO) and a private placement with institutional investors. It will do so in case the government does not fully subscribe to its right issue. If the government maintains its 59% stake in the behemoth, only then would a rights issue be an option. However if it is open to reducing its stake, to 51-55% then a combination of instruments would be used to raise capital.

According to the Chairman, the bank would require capital of about Rs 470 bn over the next three years. Out of this, Rs 200 bn would come from primarily from its rights issue. The balance Rs 270 bn would come in from annual profits at Rs 90 bn per year. The bank needs to raise capital soon, as its capital adequacy ratio has fallen below the 8% mark, on account of a pension charge which was taken to its reserves in the final quarter of the financial year 2010-11 (FY11). The bank is hopeful of receiving government's consent for its rights issue by the second or third quarter of FY12.

Wind turbine manufacturer Suzlon Energy announced that it has bagged a Rs 6.5 bn order from Orient Green Power Company to supply turbines for projects with a cumulative capacity of over 100 MW (mega watt). Orient Green Power is the first renewable-energy company to list in India. India is strongly seeking investment in renewable sources of energy in order to counter the rising costs of oil imports. This will also help to improve the budget deficit situation. India is the world's third-largest market for wind parks just after China and the United States. This order involves the supply of 48 Suzlon wind turbine units. The first project which is in Gujarat will have a capacity of 50.4 MW and will be commissioned by May, 2012. The second 50.4 MW project in Karnataka will be implemented a month later, by June 2012.

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Feb 23, 2018 (Close)